New building sites to get £3m cash injection as the Government aims to speed up construction of up to 25,000 new homes

The Government has earmarked £3million over the next two years to speed up the construction of up to 25,000 new homes across 85 new building sites as it faces increasing pressure to build more affordable properties amid a housing shortage.

The funds will be allocated to councils through a bidding process and if a council is successful, it is expected to receive about £50,000 to spend on tackling backlogs and other issues which are slowing down the building of houses.

These normally include the completion of financial agreements and signing-off conditions attached to planning permissions.

New homes: The fund will help speeding up housebuilding at some 85 sites across the country, according to the Department for Communities and Local Government

Areas with a higher number of new building sites and those councils which can demonstrate that an early start could provide value for money will be given priority, the Department for Communities and Local Government said.

Housing and planning minister Brandon Lewis said the fund was aimed at getting the work started at housing sites where development had been granted in principle.

He said: ‘In 2010 we inherited a housing industry in paralysis - where neighbours and developers were at loggerheads, aspiring home owners couldn't get on the property ladder and housebuilding levels were at their lowest since the 1920s.

‘Since then we've got Britain building, not least through our planning reforms to put power in the hands of communities. Now, the challenge is to get work started on sites where development has been agreed as soon as possible.

‘Today's £3million fund will do just that, getting work started on as many as 85 sites, creating jobs as well as up to 25,000 new homes.’

The deadline for submitting a bid is at the end of August and a maximum of £1.5million will be available in 2015-16.

The Government has faced escalating pressure to build more affordable homes as a shortage of supply across the country is seen as one of the reasons behind the steady increase in house prices witnessed over the past years.

House prices have eased slightly over the past months, partly because of the summer lull, stricter mortgage rules and talk of an early rise in interest rates.

Property website Rightmove said recently that the North and East Midlands have had the biggest drops in asking prices so far in July, but London also experienced falls, including areas such as Wandsworth and Islington with values down nearly four per cent.

Despite this, annual house price figures continue to rise and experts seem to all agree that prices are set to continue to edge higher over the coming months.

Rightmove predicts values will be eight per cent higher by year end hitting the top end of its original 2014 forecast of between six and eight per cent. Since January, Rightmove says prices are up 6.5 per cent overall.

Earlier this week, figures from the Land Registry for the month of June put the average property value in the UK at £172,011, a 6.4 per cent increase on the same month last year.

And experts at property firm CBRE believe they will rise 30 per cent to £243,000 by 2019, with growth in the country as a whole catching up with runaway prices in the capital, where values will hit £520,000 in in five years’ time.